HB 3900
Disallows, for purposes of personal income taxation, the mortgage interest deduction for a residence other than the taxpayer's principal residence, unless the taxpayer sells the residence or actively markets the residence for sale.
Jurisdiction
Oregon
Session
2025 Regular Session
At the request of
(at the request of Ecumenical Ministries of Oregon)
Committee
Housing and Homelessness
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Sign in to take action- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill proposes to limit the mortgage interest deduction for homeowners, except for their primary residence, in Oregon’s personal income tax. The deduction would only be allowed if the taxpayer sells the property or actively markets it for sale. Additionally, the deduction for a principal residence will phase out based on income, and a new account, the Oregon Housing Opportunity Account, will be established to receive revenue generated by these restrictions. The bill takes effect 91 days after the legislative session concludes.
Key provisions
- Disallows mortgage interest deduction for residences other than the taxpayer’s principal residence.
- Allows deduction only if the taxpayer sells or actively markets the residence for sale.
- Phases out the deduction for principal residences based on income.
- Establishes the Oregon Housing Opportunity Account.
- Transfers revenue from the deduction restrictions to the Oregon Housing Opportunity Account.
- Applies to tax years beginning on or after January 1, 2026.
- Adjusts the basic standard deduction annually based on the Consumer Price Index.
- Allows for additional deductions for age 65 or older and blindness.
Who is affected
- Homeowners
- Taxpayers
- Oregon Residents
- Real Estate Investors
- Individuals with significant property holdings
Notable changes
- Reduces the availability of the mortgage interest deduction for investment properties.
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